WRAPUP 2-SAfrica mining faces strain, power still a worry

* Global downturn dents metal prices

* SAfrica power supply still vulnerable

* State budget cannot pay for Eskom's expansion

(Wraps public enterprises minister's comments)

By Wendell Roelf

CAPE TOWN, June 23 (Reuters) - South Africa's mining industry has been hard hit by sharply lower commodity prices due to the global economic downturn and is under a "severe strain", Minister of Mineral Resources Susan Shabangu said on Tuesday.

Analysts had forecast the sector could lose more than 100,000 jobs this year owing to the crisis, but Shabangu told parliament a government-led process to save jobs had paid off.

"The mining sector is under severe strain, but we have sown the seeds of a resilient economy," Shabangu said during a budget vote session for various ministries.

"The aggregated commodity prices of minerals produced in the country lost some 40 percent of its value, while job losses were constrained to less than 25,000, representing about 5 percent of the total employment in the industry," she said.

Shabangu said she was keenly following consolidation in the mining sector. Before her speech to parliament, she told reporters the government opposed a possible merger between Xstrata (XTA.L) and Anglo American Plc (AAL.L). [ID:nWEA7861]

"We are keenly watching these developments to ensure, among others, that such consolidation does not take us back to the age of anti-competitive practices, that there are no job losses and to ensure that it does not affect market principles," she said.

Anglo rejected Xstrata's approach on Monday. [ID:nLM97031]

POWER SHORTAGE

Shabangu's cabinet counterpart Dipuo Peters, who heads the energy ministry, said an internal threat to the country's mines still existed because it was battling an energy crunch.